From early November 2006 till last Friday, the KLSE composite index has gone up by more than 20 %. The West may consider that a bull run, but not the Asians, since the rally over these three months or so were not broad based. Many low liners and second boarders had hardly moved at all.
Last week, there were some rallies on selective low liners. I had a small punt on two counters and they went up 20% within three days. The sale of the shares on Friday reaped a gain of more than two thousands USD. The profit is more than enough to cover my weekend pocket money, purchases of items and family clothing for the Chinese New Year celebrations! It is timely. Meanwhile, the two finance stocks (stockbrokers) that one bought end November when no one wanted the particular shares, have rallied by more than 50%. While some funds are happy with their 20+% increase in the blue chips, one waits for the expected 80% or more capital gain for one of the two finance stocks.
Good times are when almost anyone in the KL share market can make money – just like in the Bull Run of 1993. Times when a share bought early in the morning can go up by the maximum allowed 30% before the noon close and rise by another 30% by the second session close that is a restricted 70% increase within one day. That would be the start of a Bull Run for everyone not just the big boys – funds and institutions.
Over the past few years, one has indicated to friends and family alike that once the share market is awashed with cash, there will be good times ahead. And most likely the money will come from funds that were invested in weaker South East Asian economies. It seems that have come true and the daily traded values this past couple of weeks were above 3 Billion RM. That is a lot of liquidity, and it is sloshing around in the KLSE. The active market will certainly attract more retailers and thereby the huge American and British funds to come in. Together they have the financial muscle to really move the market and bring back the good times to the KLSE.
Therefore expect a Bull Run after Chinese New Year – the Chinese like to gamble during this festive season - and carefully planned for that big red packet (‘Angpow’ or ‘Hoongpow’) as indicated in an earlier entry. Do not chase shares early next week – they have gone up quite a bit and ripe for profit taking. If you want to buy those, wait for dips. A better bet could be other low liners that are laggards or second boarders. But do some homework. If lucky, the laggards and second board counters can become big winners for investors sometime late February or in March.
While it is logical to believe that continual liquidity will bring up the share market, there could be some revelation of heaven secrets on how the KLSE will perform over the next two months and for the rest of 2007. Therefore stay tuned for more hints.
Meanwhile, good luck to all those readers who invest in Malaysian shares. And let the good times roll!